Twitter Changes Math on Counting Users Who Don’t See Ads

Twitter CEO Dick Costolo speaks during a panel discussion at the International Consumer Electronics Show in January.

Associated Press

Twitter on Monday acknowledged it miscalculated an important metric involving its user count.

The company in a quarterly filing said that 11% of its 271 million monthly active users in the three months through June accessed the service through a third-party app. That is about 8.9 million fewer users than it had said during its second-quarter earnings call just a few weeks ago. At that time, Twitter estimated 14% of its users use Twitter through third party apps.

The numbers are important because these are the users who never log directly into Twitter.com or the mobile app, and hence never see ads, the company’s main revenue source.

As The Wall Street Journal detailed this month, the percentage of these third-party app users had doubled from 7% one year ago – when stripped out of Twitter’s user count, overall monthly active user growth actually slowed to 3.9% from 4.4% three months earlier. That’s a different story than Twitter’s narrative of accelerating user growth.

Now Twitter says the 14% of third-party app users is actually lower after it “reviewed and refined our processes.” The company didn’t provide a reason for the new calculation in its filing, but in an online presentation accompanying Twitter’s second-quarter earnings report, the company has added a footnote (see page 3) that says it “later discovered that this number included certain users who accessed Twitter through owned and operated applications.” That would presumably mean that users of Twitter’s own desktop client, Tweetdeck, were among those included in the original calculation.

A Twitter spokesman declined to comment, including whether the error applies to previous quarters, except to say there is no material change to historical figures.

In that case, Twitter can now claim that user growth — absent the third-party app users — actually accelerated to 7.5% from 4.4% three months earlier.

Twitter did disclose a new metric within this pool of third-party app users – it said as much as 8.5% of its active members use third-party apps that are able to automatically ping its servers without any real action taken by the user. In other words, up to 23 million of its users may not be interacting with Twitter content at all.

Facebook has said that as of Dec. 31, 2011, fewer than 5% of its daily active users world-wide access the network through third-party apps that automatically contact its servers. This doesn’t include instances when users share or “like” content from a third-party app or website on Facebook. The company hasn’t disclosed a more recent figure.